I’m writing this just hours before the Tuesday, Jan. 22, Mesquite City Council meeting. You’re reading it two days after the meeting.
Not having a crystal ball, or at least not one that works, I can’t say with certainty that the council will take no action on agenda item No. 18: “Discussion and possible direction regarding alternative power sources.” The item is marked for action, however Mayor Mark Wier on Wednesday, Jan. 23, told the Overton Power District board “…(T)here is no agenda item for the municipal take-over of the power company.”
And City Councilman Karl Gustaveson, who also serves on the Virgin Valley Water District board, told me at the water board’s Jan. 8 meeting that he had placed item No. 18 on the agenda so the public would hear what’s being discussed behind closed doors. He said he was criticized for that at the council’s Jan. 15 technical review meeting. I don’t know. Those meetings are held at 1:30 p.m. on alternate Tuesdays and I’m usually busy finishing up that week’s edition.
So I presume that the agenda item did not result in action. But, although “presume” is spelled with seven letters, in newspaper work it’s a four-letter word.
I sincerely hope that city doesn’t consider establishing its own power company. I base that on past experience and covering the problems faced by a rural electric coop in Ely, where I lived and worked for 25 years, and its power provider in Utah.
Mt. Wheeler Power, Inc., is the largest of six rural coops that form Deseret Power, which generates or purchases power for its members. Among those six members, besides Mt. Wheeler, is Dixie Escalante Rural Coop, located in Beryl, Utah, which provides the power for Beaver Dam, Ariz.
I became editor of the Ely Daily Times in 1986. The EDT was owned by the parent company of this newspaper.
I knew a little about Ely before I moved there because of the MX Missile project. The EDT broke the story that the U.S. Air Force was planning to install a mobile-missile system which would be on rail cars and always on the move, making the Peacekeeper missiles a difficult target for the Soviets.
But MX meant more than national security to the communities where the 13,900-square-mile missile complex was to be located. It meant prosperity. It meant growth.
And that growth needed to be prepared for. The rural coops which served those communities were going to need more power. This was the mid 1980s and the concept of green power hadn’t sprouted much. Deseret already had its full allotment of hydro power, so that meant purchasing power on the open market or building its own generating facility.
The Deseret Power Board, with its chairman Tom Bath, who also was chairman of the Mt. Wheeler Power Board, decided to build its own coal plant.
It was big news at the EDT in 1986 when the Bonanza Power Plant was constructed 30 miles south of Vernal, Utah. Unfortunately, the U.S. government already was trimming back its plans for MX.
The end result was that Desert Power ended up with a brand new coal plant that could generate an additional 500 MW to meet its growth without that growth occurring.
But that didn’t diminish the debt to build the plant. And the rural coops are committed to keeping rates as low as possible.
But to pay down the debt, high rates were going to be needed. Deseret sold as much of the excess power on the open market as possible. But rates were low in those bygone days.
And the coop boards are made up of ratepayers. In some cases, large ratepayers. And, in Ely, at least, there never was appetite to raise power rates high enough.
For years Deseret Power teetered on bankruptcy. But a new general manager at Mt. Wheeler Power, John Wheeler, eventually was able to work out a plan with the lenders to forestall a crisis. And when the brownouts of the early 21st Century struck California and Nevada Power (now NV Energy) rates in Las Vegas skyrocketed, Bonanza’s excess power sold for premium amounts.
The Deseret Power directors of the late ‘70s and ‘80s made a correct decision to build the new power-generating plant. They couldn’t foresee that the growth would not materialize. And not preparing for the expected growth was not an option.
But their best decision almost bankrupted the company and its member coops.
The Mesquite City Council and staff likely is no better at divining the future. If the city operates its own power company, it will find it must look farther into the future than five years. And today, any new power company faces regulations for green power that didn’t exist 30 years ago.
A lot of the Overton Power District’s financial problems certainly resulted from preparing for future growth that hasn’t yet materialized. Beyond that, I don’t know enough to say if too much was paid to workers or to management.
It’s a cautionary tale. Risks are involved no matter what alternative options, if any, the city may choose. Going with Escalante will have similar representation problems as the city has with OPD. The coop is governed by a board that meets in Beryl, just over 100 miles away.
And coops elections are not based on one-man, one-vote. Each member gets a vote. You and your spouse would have to share your household vote, while I get two: one for my home membership and one as manager of a business member.
If the problem with OPD is it is insulated from its ratepayer members that can be dealt with. The OPD, unlike NV Energy, is not regulated by the Public Utilities Commission. It’s expected to be regulated by us during the elections.
If that system doesn’t work, we can petition our legislators to change the law and place GIDs, general improvement districts, such as OPD under PUC authority. That would be taken as an idle threat by the OPD board and management. Any corrections needed to prevent that would be taken.